Worldwide annual app store downloads to hit 102 billion this year

In 2012, 64 billion mobile apps were downloaded from app stores worldwide generating $18 billion in revenue. According to new figures released by Gartner, the download figure for 2013 will reach 102 billion with revenues approaching $26 billion.

In 2012, 11% of total revenue was generated by in-app purchases. This year, Gartner forecasts in-app purchases will generate 17% rising to nearly half of total revenues (48%) by 2017.

However, while in-app downloads will exhibit strong growth throughout this year and next, it will slow in later years as the uptake of smart devices increases among "mass-market consumers whose willingness and/or affordability to spend on IAPs is lower than early adopters".

Nevertheless, says Gartner, in-app purchases will become a "major monetization method for apps stores and developers".

"We see that users are not put off by the fact that they have already paid for an app, and are willing to spend more if they are happy with the experience," says Brian Blau, research director at Gartner.

"As a result, we believe that IAP is a promising and sustainable monetization method because it encourages performance-based purchasing; that is, users only pay when they are happy with the experience, and developers have to work hard to earn the revenue through good design and performance."